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4 things to consider before asking employees to sign non-competes

Running a successful business in Texas is about much more than having a good product or service to offer. Business owners must also manage operational tasks like making employment decisions and complying with state and federal laws.

For instance, if you are an employer, you may be tempted to have all your employees sign non-compete agreements to protect your company from competitors. Before you do this, however, you will want to ask yourself some important questions.

  1. Do I have information that warrants protection?
  2. Does this employee have access to that information?
  3. Am I prepared to enforce a non-compete agreement?
  4. Would the terms of a non-compete create an unreasonable burden on the employee?

Answering these questions after careful consideration can help you make an informed decision on whether or not it is prudent to have employees to sign this type of agreement.

The fact is that creating and attempting to enforce unnecessary or overreaching non-compete agreements can do more harm than good for employers. Not only can it ultimately waste valuable resources, but it can also deter desirable job candidates and paint a company in a negative light, affecting its reputation in the market.

That being said, non-compete agreements can be incredibly valuable. They can protect trade secrets and prohibit employees from leaving your company for a direct competitor and divulging information that gives you a competitive edge.

If you do decide to have an employee sign non-compete agreements, it is crucial that they be legally valid and enforceable. If they are not properly prepared, you may not be able to take action against a breaching party. With all this in mind, it would be wise for employers to create and/or review their non-compete agreements with the help of an attorney experienced in drafting, negotiating and litigating employment agreements. 

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